The total net inflows into spot Bitcoin ETFs launched in January 2024 has reached around 39 billion dollars. However, according to a report by 10x Research, a significant portion of these inflows stem from short-term trading strategies and arbitrage opportunities. Only a small fraction of investors are considering Bitcoin as a long-term investment.

Markus Thielen, the Research Head at 10x Research, mentioned that only 17.5 billion dollars, which is 44%, represent actual long-term investments. Arbitrage strategies, particularly methods known as “carry trade,” constitute 56% of the inflows. This strategy involves investors purchasing spot Bitcoins and simultaneously opening short positions in Bitcoin futures to profit from price differences between the two markets. Thielen stated that this demonstrates a much lower real demand for Bitcoin than what is suggested in media reports.

Thielen noted that following the recent U.S. presidential elections, there has been an increase in long-term Bitcoin purchases, indicating a shift in buying behavior. Despite the increase in long-term purchases, a decrease in retail trading volumes has undermined funding rates, leading to a wave of ETF outflows. After the resignation of the cautious SEC Chairman Gary Gensler regarding crypto regulations, the asset management company 21Shares applied for a Polkadot ETF. This application was made at a critical time for the future of crypto ETFs. Additionally, Tuttle Capital Management has applied for crypto-based leveraged ETFs, including funds linked to popular meme coins. Analysts suggest that these applications are part of a strategy to test the boundaries of crypto-friendly regulators at the SEC during the Trump era.